New agreement supports value-based pharma contracting

June 1, 2016

Industry experts are using their proprietary data/analysis to help structure contracts between pharmaceutical companies and plans.

Value-based contracting is critical for the future of optimal medication use, as evidenced by an engagement between a tech and data company, an advisory services company and a global biopharma company.

Inovalon, a technology company providing advanced, cloud-based analytics and data-driven intervention platforms to the healthcare industry, today announced that it has entered into an agreement with Bristol-Myers Squibb to bring Inovalon and Avalere's combined capabilities to bear on supporting real-world outcomes and value-based contracting initiatives. Avalere, which was recently acquired by Inovalon, provides data-driven advisory services and business intelligence solutions to the pharmaceutical and life sciences industry.

Mendelson

"Plans are demanding this approach because of the need to field competitive insurance products on the exchange and the need to keep cost under control," says Dan Mendelson, president of Avalere Health and member of the Inovalon executive leadership team. "Plans are also motivated to work with pharmaceutical companies that are engaging in real-world data and interested in taking responsibility for the value of their products."

Avalere will prepare value-based contracts for key Bristol-Myers Squibb products, using Inovalon's Medical Outcomes Research for Effectiveness and Economics Registry (MORE2 Registry). The MORE2 database contains detailed cost and quality information for more than 130 million patients.

"We will use these data to prepare analytic algorithms that will serve as the basis for value-based contracts with plans that are seeking to improve the health of their members through optimal medication use," Mendelson says.

Interest in value-based contracts will also drive policy change, according to Mendelson. Back in January, Avalere did some collaborative policy work with Eli Lilly and Anthem, conducive to allowing health plans and manufacturers to enter into a variety of value-based contracting arrangements, aligned with the shift toward value-based payment and the goal of promoting access to high-value care.

This could include creation of legislative/regulatory exceptions for Best Price and all other relevant government pricing calculations and requirements as they relate to products sold or transferred under value-based contracts, as well as additional safe harbors to the federal Antikickback Statute (AKS) that protect value-based contracts from AKS liability.